Irish shock and anger as tapes reveal bankers' behaviour

Opposition politicians described the conversations in the tapes published by the Irish Independent as "shocking to the core"

Very few people in the Republic of Ireland doubted that the banks were less than honest in their dealings with both the Irish Central Bank and the government.

But to hear how apparently blatantly dishonest they were has shocked many.

Sometimes it is not just what is said it is the tone that matters.

It now seems inevitable that nearly five years after the bank guarantee, now widely regarded as disastrous and which has cost the Irish taxpayer so dearly, some form of public investigation will follow.

The guarantee was introduced by the then Fianna Fail/Green Party coalition government.

Back in September 2008, in the wake of the collapse of Lehman Brothers, panic was in the air.

Banks across the world were reluctant to lend to each other because they did not know how solvent each other was nor the scale of their own debts.

Appalled

We know that late one night the then Irish prime minister, Brian Cowen, and his finance minister, Brian Lenihan, were persuaded by Irish bankers to guarantee several Irish banks and financial institutions to the tune of an estimated 440bn euros ($575bn, £375bn), a figure that is several times the country's economic output.

Some cabinet ministers had to be woken from their slumbers to agree to the measure before the markets opened.

“Start Quote

You pull them in, you get them to write a big cheque, and they have to keep, they have to support, their money”

End QuoteJohn Bowe, in recorded phone callAnglo Irish bank

The British and the Germans were among those appalled at the guarantee, believing that cash would flow to the apparent safety of Irish banks.

And it did, but only for a while.

In the end, the reality of the bankrupt nature of the Irish banks and building societies dawned.

However it was too late to save the now-exposed Irish taxpayer, who has now suffered five years of tax rises and spending cuts as a result.

And if there is one financial institution that really annoys people it is Anglo Irish Bank, the one favoured by the property developers.

So, they were furious when they woke up to hear a former senior Anglo banker, John Bowe say to his colleague, Peter Fitzgerald, that the bank was seeking 7bn euros ($9bn; £6bn) in funding from the Central Bank but "the reality is that actually we need more than that" and that the strategy with the Central Bank was "you pull them in, you get them to write a big cheque, and they have to keep, they have to support, their money."

The two bankers whose call was recorded by Anglo's phone and security system, have since issued statements denying they were part of a strategy to mislead the Central Bank saying they knew of no such effort.

'Improper'

In another recording obtained by the Irish Independent they are heard to laugh when John Bowe tells Peter Fitzgerald the 7bn euros will never be paid back.

Listeners to radio phone-in shows were far from amused knowing that Anglo has cost the Irish taxpayer 30bn euros ($39bn; £25bn).

Later recordings reveal that Anglo's chief executive, David Drumm, advised his subordinates not to be too blatant about abusing the Irish government's bank guarantee in attracting new cash.

"Just get the... money in," he said.

He is heard to laugh as one of his executives sings Deutschland Uber Alles because of the deposits flowing in from Germany.

John Bowe has said in a statement that he deeply regrets the tone and language used, which was "both improper and inappropriate".

Whatever about the gallows humour, what strikes most people listening to the tapes is the lack of realisation that their bank had utterly failed and the lack of concern that that they were landing the tax-payers with a massive bill that would threaten to bankrupt the state.

The current prime minister, Enda Kenny, has said he understands how angry people feel and it now seems certain that over the summer months the government will work on some mechanism to allow some form of public enquiry.

Criminal trials of those accused of wrong-doing in Anglo-Irish bank are due to take place next year.

But the question many ask is: "Why has it all taken so long both for the trials and an enquiry? And why, unlike America, has nobody gone to jail?"

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